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The Industrial Awakening:
The Internet of Heavier Things
EE392n Intelligent Energy Systems: Big Data
April 2016
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Personal
• Joint MBA/MS 2008
• 3 years in Oil & Gas and Chemicals investing
• Currently Partner at KPCB (Joined ‘08)
• Areas of Interest: Intersection of IT and Sustainability
– Industrial IoT
– Smart Grid
– Wind
– Efficiency
– Buildings (including lighting)
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Investing at the Intersection of Innovation and Industry
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MOBILEMACHINELEARNING SENSORS
BIG DATA
CLOUDCOMPUTING ROBOTICS
REMOTESENSING
BATTERIESBLOCKCHAIN
ENABLING TECHNOLOGY INNOVATIONS TRADITIONAL INDUSTRY
GGF
SECULAR TRENDS: Climate Change, Urbanization, Population Growth, Regulation, Consumer Behavior
NEW BUSINESS MODELS: SaaS, Apps, P2P, Service-ization, Marketplaces
00110011
01111000
UTILITIES
AGRI BUSINESS
AUTO
INDUSTRIALS
Industrial Data: Machine Generated Data Vastly Outpacing Human Data
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0
10
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2014 2020E
Connected Endpoints (B)
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5
10
15
20
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2012 2014
Digital Sensor Shipments (B)
MORE SENSORS GREATER CONNECTIVITY
NETWORK SENSING DATA AGGREGATION ADVANCED ANALYTICSCONNECTED SERVICES
(tools)CONNECTED SERVICES
(solution)
IoT disruption enabled by megatrends
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Pervasive, cheap, and tiny sensing
Decreasing compute and storage costs
New abilities to process and analyze
data
Ubiquitous connectivity
Convergence of key enablers indicate coming demand for pervasive sensing and vertical-specific analytics applications
Research indicates industrial IoT has huge value creation
potential
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• According to Cisco, manufacturing (includes oil and gas production and process industries) represents the largest industry-specific IoTvalue creation opportunity over the next ten years (in terms of revenue enhancement and cost savings)
• 50% of value creation (~$2T) stems from implementation of “smart factories,” including analytics-enabled integration of labor, capital, and technology
• Gartner estimates the IoT will have a cumulative economic value add of $1.9T between 2014 and 2020; $290B of this will be in manufacturing / oil and gas
• GE estimates IoT-enabled services and maintenance constitutes $20B in annual savings, while the “Industrial Internet” will be responsible for $10-15T increase in GDP over next 20 years; Morgan Stanley estimates GE’s Predix platform has an annual revenue run rate of $1B
• Cisco estimates that 99.4% of physical objects are unconnected, and that the number of connected objects will increase from 14.4B today to 50B in 2020 (23% CAGR)
“Shell estimates that predictive condition monitoring…could save it 50% of its cost in maintenance in terms of labor and spares.” –J.P. Morgan
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“An oil and gas producer could anticipate benefits of $326M over ten years per field…[by] integrating and managing data streams from throughout the field.” – IBM
“It takes 313M labor-hours a year to service gas turbines, engines, freight…the total estimated value of this work is $20B…Consider how much time and effort is ultimately lost.” – GE
By reviewing its operational data, “a chemical company was able to reduce its waste of raw materials by 20% and its energy costs by 15%.” – McKinsey
Tremendous value capture opportunity -- from data sources that largely exist today
IoT benefits clear and material at smaller scale
Security
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Ten Specific Areas of Interest
Network
Connected Services
Product as a Service
Payments
Retrofits
Translation
Vertical Applications
Insurance The Platform
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Security
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Network
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Connected Services
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Product as a Service
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Insurance
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Payments
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Retrofits
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Retrofits
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Translation
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Vertical Applications
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The Platform
Security
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Ten Specific Areas of Interest
Network
Connected Services
Product as a Service
Payments
Retrofits
Translation
Vertical Applications
Insurance The Platform
